News

09 November 2011

Press release

Enforcement instruments

Anti-money laundering: FINMA concludes its audit on dealing with PEPs

The Swiss Financial Market Supervisory Authority FINMA has investigated the way in which banks have dealt with "politically exposed persons" (PEPs). Most financial institutions have fulfilled their particular due diligence obligations satisfactorily to well; in four cases FINMA will open enforcement proceedings. FINMA has not identified the necessity to adjust the current regulations.

FINMA has audited the approach adopted by 20 Swiss banks when dealing with PEPs. This was prompted by the imposition of three freezing orders by the Federal Council in spring 2011 in connection with the events in Tunisia, Egypt and Libya.

The results of FINMA's investigations have shown that the majority of the 20 banks audited are well aware of their obligations when dealing with PEPS, and implement them correctly and efficiently. This applies to identifying PEP relationships and to the further measures required to comply with due diligence obligations. At the banks, where minor shortcomings were identified, FINMA is monitoring the implementation of the measures introduced and is stepping up the intensity of its general anti-money laundering supervision. FINMA deemed specific points of the approach adopted at four banks to be inadequate and has initiated enforcement proceedings.

Business relationships with PEPs are not prohibited, but the law requires the banks to treat such relationships with greater care. Switzerland's regulations in this respect fulfil or exceed the international FATF standards. On the basis of the preliminary investigation, FINMA has not identified any need for action in terms of anti-money laundering regulations where PEPs are concerned.